In­done­sia hopes to min­i­mize wealth gap through tourism

The Jakarta Post - - BUSINESS - Ste­fani Ribka

In­done­sia con­tin­ues to push for in­vest­ments that spur qual­ity growth in a bid to dis­trib­ute in­come more equally through var­i­ous sec­tors, in­clud­ing tourism.

In­vest­ment Co­or­di­nat­ing Board (BKPM) head Thomas Lem­bong said the gov­ern­ment does not be­lieve in a trickle-down ef­fect — where one builds a coun­try’s econ­omy through jack­ing up in­vest­ments in any sec­tor — and does not worry about wel­fare distri­bu­tion it­self.

“I be­lieve that we have to build a just and equitable so­ci­ety from the very begin­ning […] China’s eco­nomic miracle is its suc­cess in rais­ing hun­dreds of mil­lions of peo­ple from poverty, not in mak­ing a few mil­lion peo­ple ul­tra­rich,” he said at the Bloomberg Live ”The Year Ahead Asia” sum­mit on Wed­nes­day.

In­done­sia’s Gini ra­tio — a mea­sure of inequal­ity in which zero rep­re­sents com­plete equal­ity and one inequal­ity — has con­tin­ued to im­prove over the years and was at 0.394 in Septem­ber 2016 from 0.41 in 2012, ac­cord­ing to data from the World Bank and the Cen­tral Sta­tis­tics Agency (BPS).

The gov­ern­ment aims to fur­ther re­duce it to 0.36 in 2019, still higher than 0.32 recorded in 1999.

Pres­i­dent Joko “Jokowi” Wi­dodo high­lighted tourism as one the sec­tors in which in­vest­ments would con­trib­ute to such fairly dis­trib­uted growth as the in­dus­try re­quires many skilled work­ers across the coun­try.

BKPM data showed that in­vest­ment in tourism has grown by 37 per­cent year-on-year (yoy) to Rp 12.4 tril­lion (US$916.6 mil­lion) in the first half of this year. Mean­while, the av­er­age growth of in­vest­ment in the sec­tor stood at 17 per­cent in the 2012 to 2016 pe­riod.

Jokowi said now was a “golden chance” due to the tourism boom amid the emerg­ing mid­dle-in­come class in the Asia-Pa­cific re­gion.

“The con­tin­u­ing rise of hun­dreds of mil­lions of peo­ple in China, in In­dia and the rest of the Asia-Pa­cific into the global mid­dle class is lead­ing to a tourism boom. But the tourism boom would pass In­done­sia by if we are not ready with our in­fra­struc­ture,” he said at the same event.

In­done­sia is re­vamp­ing 10 “new Bali” des­ti­na­tions across the is­lands un­til 2019 to at­tract more tourists. It aims to wel­come 20 mil­lion for­eign vis­i­tors by then.

There­fore, in­fra­struc­ture, which in­cludes up­grad­ing air­ports in main des­ti­na­tion ar­eas, will con­tinue.

HAS Hanand­joed­din Air­port on Beli­tung Is­land as well as Ko­modo Air­port in Labuan Bajo in West Nusa Teng­gara (NTB) will soon get in­ter­na­tional air­port sta­tus, al­low­ing them to have more in­ter­na­tional routes.

Hav­ing an in­ter­na­tional air­port with di­rect flights, Jokowi con­tin­ued, was es­sen­tial to in­crease the num­ber of tourists. Manado in North Su­lawesi, for ex­am­ple, saw the num­ber of Chi­nese tourists leap from 12,000 per year to 12,000 per month as sev­eral air­lines opened di­rect flights to and from China.

The World Bank has sug­gested the gov­ern­ment im­prove their lo­cal ser­vice de­liv­ery, strengthen so­cial pro­tec­tion pro­grams (such as cash trans­fers and ed­u­ca­tion sub­si­dies), pro­mote skills train­ing op­por­tu­ni­ties for the work­force and use taxes and gov­ern­ment spend­ing to re­duce inequal­ity.

Newspapers in English

Newspapers from Indonesia

© PressReader. All rights reserved.